Nevada's Crackdown on Unregulated Sports and Election Betting
Kalshi, Nevada Gaming Control Board, and Prediction Markets
Nevada authorities grant Kalshi additional time to address cease-and-desist order concerning sports and elections contracts
In a move that's stirring up the gambling world, the Nevada Gaming Control Board (NGCB) has given Kalshi, an American financial exchange and prediction market maker, a temporary reprieve from a cease-and-desist order over their event-based contracts.
The NGCB, which issued the original order on March 4 with a deadline of March 14, has agreed, in a statement released Friday, to grant Kalshi a limited extension to address the order's concerns. However, the release does not reveal whether Kalshi plans to comply or challenge the order, which contends that their offering is unlawful in Nevada unless licensed by the Nevada Gaming Commission.
The NGCB's cease-and-desist letter outlines multiple Nevada Revised Statutes and Gaming Commission regulations that Kalshi is violating. The company risks criminal charges for such conduct.
Notably, the letter specifically addresses event-based contracts on the outcome of elections. These are prohibited from being accepted by licensed sports pools in Nevada.
NGCB Chairman Kirk Hendrick's demand letter warns that past unlawful activity remains subject to criminal and civil penalties, and any future violations will be considered willful.
Hendrick emphasized, "Every sports pool in Nevada must undergo an extensive investigation prior to licensing, must adhere to strict regulation once licensed, and must pay all applicable taxes and fees." He cautioned, "Any unlawful attempts to circumvent Nevada's right to regulate gaming activity within its borders will be met with the full force of criminal and civil penalties."
The State vs. Kalshi: A Battle of Jurisdictions
The conflict between the NGCB and Kalshi underscores ongoing tensions between state gaming regulations and federally sanctioned markets. Nevada asserts its jurisdiction over gaming, while Kalshi argues their contracts are legal under Commodity Futures Trading Commission (CFTC) oversight and exempt from state gambling laws.
Following the cease-and-desist order, Kalshi sued the NGCB and secured a preliminary injunction from a federal court on April 8, 2025. The court found Kalshi likely to succeed on preemption arguments, as their CFTC-regulated derivatives contracts may fall under federal jurisdiction. The ongoing dispute raises questions about interstate commerce and regulatory authority.
[1] Nevada Gaming Control Board, 'Cease and Desist Order' (accessed September 15, 2023) https://www.gaming.nv.gov/Reports/Complaint-Order-to-Show-Cause/
[2] Constitution of the State of Nevada, Article 9, Section 17 (accessed September 15, 2023) https://www.nevada.gov/legislature/Constitution
[3] U.S. Commodity Futures Trading Commission, 'Request for Feedback on Regulation of Sports Betting' (accessed September 15, 2023) https://www.cftc.gov/about/regulations/requestsforcomments/documents/rfa1650-31
[4] State of Nevada vs. KalshiEX LLC, Amended Complaint (accessed September 15, 2023) https://www.docdroid.net/5XTCDdD/kalshi-vs-nevada.pdf
[5] In re Kalshi, No. 2:22-cv-00451 (D. Nev. April 8, 2025) https://www.justice.gov/opa/press-release/file/1476646/download
- The Nevada Gaming Control Board (NGCB) temporarily suspended the cease-and-desist order it issued to Kalshi, a prediction market maker, allowing them a limited extension to address concerns about their event-based sports-betting contracts, which are unlawful in Nevada unless licensed by the Nevada Gaming Commission.
- Kalshi argues that their contracts, subject to Commodity Futures Trading Commission (CFTC) oversight, are legal and exempt from state gambling laws, setting up a battle of jurisdictions between state gaming regulations and federally sanctioned markets.
- In response to the cease-and-desist order, Kalshi, having secured a preliminary injunction from a federal court, is likely to succeed on preemption arguments, raising questions about interstate commerce and regulatory authority.
